Yet again a New York city financial analyst is beating the drum about the arrival of a new and better TV service from Apple, which he says is bound to be coming, called iTV (which we assume is short for iTunes TV).
He is Gene Munster, analyst at financial group Piper Jaffray, and it was him who stared the rumour 18 months ago that Apple would launch an internet enabled ‘connected HDTV,’ an actual device, during the next two to four years that will bring its iTunes music and movie services to the living room.
It was covered (yet again) yesterday in national newspapers on both sides of the Atlantic and first time we heard it, in February 2009, it struck a chord and we thought he was right on the money. Further rumours came out that Apple was starting this off by turning its iTunes TV downloads into streams this Summer, and Apple executives were seen talking to TV and Movie Studio execs and leaks came out that the subject of their discussions was the rights for streaming, sending HD class video across the internet using a technique called adaptive streaming, something which has been shown to be possible since Apple originally launched video on iTunes. A download means you have to wait for a file to be delivered before watching it, and a stream is more like traditional TV viewing over the internet, starting instantly.
On the back of this Apple might introduce a TV set, of course, but it could also fix the Apple TV box that it has sold in the US for four years with little success and turn it into the equivalent of a pay TV service like cable or DTH services.
Munster reckons once again that a refresh of the Apple TV device which simply converts internet video content to play on any TV, is about to be launched and the seeds of the Apple TV strategy, including a streaming service, will be in this device.
We have despaired of this actually showing up, and the right time to launch it was when Hulu in the US announced its paid service in the early Summer or as soon as Netflix began to have enormous success with its online streaming service. Apple could have announced it as an iPad service when it launched that product. But these moments have come and gone and we assumed that the content industry, once bitten, twice shy, would baulk at letting Apple have another hit service like iTunes. Why? Because the success of iTunes has allowed Apple to dictate pricing and online format to the record industry and the studios don’t want to be dictated to in the same way.
If Apple did bring out a streaming service, from there it is a simple step to bundle the software and the conversion appliance into a TV set, and charge a set fee per month for the whole service and begin eating into cable and satellite TV in the US. Taking it global might take quite a bit longer and a lot more effort.
The last piece to the puzzle was that Apple was designing a set top that is a little like the iPhone 4.0 in format, with the cellular guts ripped out of it, which would be on sale for $99. That was leaked in June and so far it has not come, and would need to be announced before the end of September to have any chance of triggering a Christmas gold-rush for Apple. Munster finds it interesting that Apple is readying a new data centre in North Carolina to support the cloud based streaming iTunes service, so perhaps it is just taking longer to put together.
While we agreed that this strategy made perfect sense for Apple, we have waited and waited and seen none of the components come together. Mind you we waited a full two years for an Apple phone and it came after we almost despaired. But failure to respond to the Google TV launch of a few months ago, with a service element, would be something of a PR disaster for Apple and it really needs to come out with a response at least to Google TV, to give it a hope of retaining its early lead in online video.
Steve Jobs, Apple’s CEO has in the past dismissed Apple TV as ‘a hobby’, and while we cannot yet see a clear way for Apple to make money off the sale of a pure TV device ‘ if it fails to launch a new streaming video service, it will lose ground to rivals, and not even stay still, and that’s not Apple’s style. Look for something in the App Store or a new device like a cheap set top by Christmas, but at this stage we still cannot be sure that US financial analysts have all the answers, because Apple is so secretive, and it doesn’t even leak to get its share price up.